San Diego pension fund has $2.1 billion deficit, city happily pays out $5.2 million in retiree “bonuses”

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San Diego paying retiree pension bonuses, as city slips into financial meltdown

While the City of San Diego is scrambling to figure out how to manage its massive $2.1 unfunded pension liability, including a possible bankruptcy filing called for by some critics, bonus checks were just mailed to 6,630 retirees, thanks to a known flaw that’s been in the retirement system for over 30 years.

The bonus checks, on average of about $784 each, are part of calculation that provides for a so-called 13th check to be paid out, whenever the current year’s investment returns in the pension fund exceed 7.75 percent. Read more

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Six retired San Diego educators out-earn U.S Secretary of Education

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San Diego’s pension problems are nothing new, and lawmakers continue to search for answers on how it got into its mess and how to get out of it. The state’s pension system for retired educators has its own version of the problem, with an estimated $40.5 billion budget deficit over the next 34 years.

The San Diego Union-Tribune took a survey of pension payments made by the California State Teachers’ Retirement System to some of the local top administrators, looking for insight into how the fund pays its retirees, and found examples of outsized pensions paid to recent retirees.

Despite the fund’s financial woes, the amount paid to some of the retirees seem excessively generous.

The survey looked at educators’ pensions from the county’s 42 school districts, five community colleges and other educational institutions. Surprisingly, six of the county’s retired executives are collecting more that U.S Education Secretary Anne Duncan’s 2009 base salary of $197,000.

The county’s six highest paid educators are:

  1. Rudy Castruita, retired in 2006 as superintendent to the San Diego County Office of Education, receives $281,034 or 107 percent of his salary.
  2. Kenneth Noonan, retired in 2007 as superintendent of the Oceanside Unified School District, receives $249,011 or 92 percent of his salary.
  3. Larry Maw, retired in 2005 as superintendent of the San Marcos Unified School District, receives $229,326 or 98 percent of his salary.
  4. Ralph Cowles, retired as superintendent of Vista Unified School District in 2006, receives $223,632 or 97 percent of his salary.
  5. Sherrill Amador, retired in 2004 as president of Palomar Community College, receives $218,511 or 113 percent of her salary.
  6. Warren Hogarth, retired in 2003 as superintendent of the La Mesa-Spring Valley School District, receives $216,348 or 105 percent of his salary.

Included among the most highly-paid San Diego county retirees are 254 teachers and administrators who are paid over $100,000 per year, in addition to health care benefits.

The survey also found that the average retired teacher collects $40,633 per year, amounting to 58 percent of their final salary. That is more than the average San Diego city worker who receives $37,442 but far less than the $67,428 paid to firefighters or $62,098 for police officers.

Educators generally pay 8 percent of their salaries towards retirement, and taxpayers contribute another 8.25 percent from local districts and another 2 percent from the state.

Using the most highly paid retirees as an example, over the course of a thirty-year career, assuming an average salary of $100,000, the most that would have collectively been paid in is roughly at 18 per cent per year is $540,000. Yet based on a 25-year retirement payout for retirees and widows, the total pension benefits could likely exceed $5 million. Predictably, the math doesn’t add up.

It’s a good formula for keeping retirees happy, but with cutbacks and layoffs for currently employed teachers, an overhaul of the existing system is long overdue.

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San Diego officials make a mess of city streets

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A just-released report by City Auditor Eduardo Luna takes aim at the poor state of affairs with the city’s street repairs and maintenance efforts. Even after spending $133 million over the last seven years, the city has a work backlog of $377 million, and roughly 17 percent of city streets are rated as being in poor condition.

The report accuses city departments of poor planning and wasting taxpayer dollars by not coordinating repair work, saying that 18 percent of resurfacing work was done on streets that had the same work done within the previous two years. City departments and private companies, including San Diego Gas and Electric, routinely tear up freshly-paved streets necessitating new resurfacing, and preventing monies from being used elsewhere with more pressing needs.

City Councilman Kevin Faulconer says that “it’s the No. 1 issue among residents I speak with.” He acknowledges that city departments need to do a better job their coordinating efforts.

Over the last several years, the condition of San Diego’s streets have been in a downward spiral, while at the same time, city leaders approved hefty increases in health and pension benefits for fire and police union members. The increased pension benefits have created a massive unfunded pension liability totaling over $2.2 billion, and some experts believe that the city will ultimately need to restructure under bankruptcy protection.

Beginning Jan. 1, the city will fold the transportation and storm water department into a single unit that will handle street operations and maintenance, traffic engineering, utilities undergrounding, storm drain operation and right-of-way coordination. Officials expect that the new department will be better able to handle the coordination of repair and maintenance projects.

A non-profit trade group, The Foundation for Pavement Preservation, recently said that every $1 in well-planned city street repairs helps eliminate $6 to $14 later on rehabilitation projects.

San Diego Union-Tribune

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San Diego Judge Resigns Over Crude Behavior

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San Diego Superior Court Judge DeAnn M. Salcido has agreed to step down from the bench after being censured by the California Commission on Judicial Performance. Salcido was charged with inappropriate and intemperate behavior towards lawyers and defendants.

Salcido was appointed to her position in 2002 by Governor Gray Davis and was reelected this year. Previously, she was a deputy district attorney in both Los Angeles and San Diego counties. She was charged by the commission of 39 instances in which she made mocking, rude and off-color comments. She was also under fire for allowing her courtroom to be filmed by a Hollywood producer as an audition for a potential reality show in which she would star.

In one instance, Salcido told a defendant that he would be “screwed” if he violated probation and “we don’t offer Vaseline for that.”

Los Angeles Times

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San Diego Gets Slammed With Fiscal Crisis, Bankruptcy Proposed

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BEAUTIFUL SAN DIEGO NEARLY BANKRUPT

Former San Diego City Attorney Michael Aguirre has proposed that the city file for bankruptcy as the best way to deal with its budget deficits and ever increasing cuts in basic city services. Aguirre claims that the city could wipe out $900 million in benefits to city workers that he says were granted illegally by city council in 1996 and 2002, which were never approved by taxpayers.

The city already faces a $70 million budget deficit for the fiscal year that begins next July and is planning to slash basic services across the board. Included on the list of budget cuts are laying off 162 police officers, 60 firefighters, closing down two libraries and all but one of the municipal swimming pools. Voters recently rejected Proposition D, a proposed sales tax increase on the Nov. 2 ballot that could have eased some of the cuts. Read more

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San Diego Council Prez Makes Illegal Contribution to Brother

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$25,000 Handout for Brother Felipe's Campaign

Apparently, he though no one would notice. At least that’s what San Diego City Council President Ben Hueso must have been thinking when he diverted $25,000 in funds from his own campaign coffers for state assembly, to the campaign accounts of his brother Felipe, who is running to replace him on the city council.

According to the San Diego Union-Tribune, on October 7, Ben Hueso gave the monies from his campaign to a group called San Diegans for Healthy Neighborhoods and Strong Economy, a group created by local unions for one purpose: to see that brother Felipe get elected to the San Diego City Council. State law specifically prohibits transferring money raised for one candidate or cause to another.

Los Angeles-based campaign consultant Robert Stern said the contribution was clearly illegal. “He shouldn’t be doing this anyway … He is obviously trying to inject money in that (campaign) the law says he shouldn’t be doing.”

Campaign spokeswoman for Ben Hueso, Paola Avila, initially defended the contribution, but later backtracked admitting that the move violated the law. The Fair Political Practices Commission is looking into the matter, and has the authority to assess fines if wrongdoing is determined.

San Diego Union-Tribune

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